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34 Cards in this Set
- Front
- Back
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What is the issue with retailers?
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There are too many retailers, with undifferentiated products, chasing too few consumers. (They are stuck in a promotional strategy)
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Give an example of how Ikea and REI differentiate their promotion.
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IKEA store- They sell hot dogs, they have a child care center. REI store- They have rain chambers, they have hiking paths that you can test the boots with, they have rivers in there that you can try out the kayaks.
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What is Margin?
What is the equation for margin? |
we are talking about the selling price and the cost of goods. (How much it costs to buy it and how much we sell it for.)
selling price- cost/ selling price |
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What is the equation for margin?
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selling price- cost/ selling price
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What is the equation for mark-up
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selling price- cost/ cost
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Give an example of a high margin, low volume product.
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Hanz Jewelers
He has low volume(few products) but if he sells them, it will yield a high margin. |
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Give an example of low margin, high volume.
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Wal-Mart
Wal-mart has many products that yield low margin, but since they have fast turn-around they are profitable. |
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What are the 4 functions of the retailer?
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1. Breaking down Bulk
2. Providing Service 3. Holding inventory 4. Creating assortments |
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Give and example of breaking down bulk.
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Gas Stations (They get huge shipments so u can buy 20 gallons at a time)
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Give and example of providing service.
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Dave goes into McDonalds and the lady said can I help whose next. She wasn’t even looking at him and he tried to get her attention and she said “I’M LISTENING”
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Give an example of holding inventory.
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Cookware Company. There are tow specialty stores in Iowa that sell them. The problem is they don’t carry every color, and size. A huge threat to these stores is that you can go online and order these products and have it the very next day.
Holding inventory is the responsibility of the RETAILER |
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Give an example of creating assortments.
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This goes back to a One-Stop-Shop
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What are the 7 sources of creating a competitive advantage?
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1. Building customer loyalty
2. Location 3. Human resources... Committed employees 4. Unique/ Exclusive Merchandise 5. Distribution/ Information Systems 6. Buying Power/ Vendors relations 7. Customer Service |
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Why is it important to build customer loyalty.
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ROI on existing customers, is a lot higher than trying to get new customers
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What is important about location?
Example about McDonalds. |
McDonalds number one product is Land. They are constantly trying to figure out where the best place to put a product
Where do we put our store? If it’s a shopping product -Next to our competitors What are the demographics, psychographics of our neighborhood. Income How easy it is to get in and out of the location |
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What are the 3 things, stated in lecture, that are important with HR and training employees?
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1. Processes
2. Product- That doesn’t mean them reading the label to you 3. How to sell- Matching up peoples problems with your solution (There is an art to this. It starts with a series of questions that they can’t say NO to) |
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What is important with having Unique and exclusive merchandise?
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No other retailer sells the product so our company will be the only one that profits.
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What is an information system? and why is having an information system important to have?
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i. You need to keep a database of your customers and this will help build loyalty and relationships with your customers. (Even if you just write the customers name down and their size on an index card.)
Ex: Cherry Creek mall was built in Denver and there was a man who had a store by the new mall. He stayed competitive because he kept a database of customers and made sure he catered to their needs. |
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Why is it important to have customer service?
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a. It has to delight our customers; it has to exceed their expectations.
EX: Target has redefined their return policy (its not nearly as liberal) Ex: Best Buy- They found out that people were using their products and then returning the product and then |
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Nordstrom customer service example.
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Dave’s friend went in on his way to a business trip. The employee asked do you want the suit for your business trip. The suit wasn’t ready when he was leaving for the airport. They were so apologetic. When they got to the Hotel in New York the suit was hanging pressed in the closet with a tie over the shoulder, saying we are so sorry about the suit not being ready before you left, if the tie doesn’t fit you can return it at any Nordstrom store. (This is very expensive)
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What is employee density?
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: Sometimes employees can be a burden to the company by being too aggressive with customers. Proper training is required to know when it is appropriate to help a customer and when it becomes a nuisance.
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What is the most controllable expense?
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HR
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What are the 6 marketing strategy decisions
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product
store image placement promotion atmosphere pricing |
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Product
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- Buckle example: To reposition his store, he started carrying specialty jeans
- The product offering: The mix of products offered to the consumer by the retailer; also called product assortment or merchandise mix |
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Pricing
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- Specialty stores tend to charge the “suggested retail price”, not offering discounts
- Gross margin: The amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted |
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Atmosphere
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- How closely things are put next to each other in aisles of stores. (ping pong balls by the beer)
- Ex: Bright lighting at Old Navy to make it look like a discount store - Ex: Gap has more wood and different music than Old Navy to make it higher class - Ex: Banana Republic is shown as the highest class with dark wood - Ex: Hyvee places the cook to make fresh food near the entrance so customers want to buy more food |
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Promotion
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- Includes advertising, public relations and publicity, and sales promotion
- Want to position themselves in the consumers’ minds - Cooperative advertising: Retailers integrate brands into their promotions. They can also promote exclusive products. Target uses both strategies of cooperative advertising |
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Placement
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- Ex: College students hang out at the Airliner. One guy placed his clothes store next door because he thought that when guys were stopped at the light outside Airliner, that they would look in his store cause it’s next to the Airliner
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What are destination stores?
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o Destination stores: Stores that consumers purposely plan to visit
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what is a franchise?
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A continuing relationship in which a franchiser grants to a franchisee the business rights to operate or to sell a product
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Who is the franchisor?
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The originator of a trade name, product, methods of operation, and so on that grants operating rights to another party to sell its product
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Who is the franchisee?
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An individual or business that is granted the right to sell another party’s product
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What is the product and trade name franchising?
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: A dealer agrees to sell certain products provided by a manufacturer or a wholesaler. Common for auto and truck, soft drink bottling, tire, and gasoline industries
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What is Business format franchising?
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An ongoing business relationship between a franchisor and a franchisee. A franchiser “sells” a franchisee the rights to use the franchisor’s format or approach to doing business. Common in retailing, restaurants, food service, hotel and motel, and real estate
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